Uruguay stands out in Latin America for being an egalitarian society and for its high per capita income, low level of inequality and poverty and the almost complete absence of extreme poverty. In relative terms, its middle class is the largest in America, and represents 60% of its population. Uruguay occupies the top spots in the region in terms of various measures of well-being, such as the Human Development Index, the Human Opportunity Index and the Economic Freedom Index. Institutional stability and low levels of corruption are reflected in the high level of confidence that citizens have on the government. According to the World Bank’s Human Opportunity Index, Uruguay has managed to attain a high level of equality of opportunity in terms of access to basic services such as education, running water, electricity and sanitation.
In July of 2013, the World Bank placed Uruguay as a high-income country. By 2016, the PPA gross NATIONAL per capita income stood at US$21,625. Two main characteristics —a solid social contract and economic openness— paved the way to the reduction in poverty and the promotion of shared prosperity that Uruguay successfully followed in the last decade.
With an annual average growth rate of 4.54% between 2003 and 2016, Uruguay’s robust economic performance has given it a greater economic resilience to external shocks.
Moderate poverty went from 32.5% in 2006 to 9.4% in 2016, while extreme poverty has practically disappeared: it went down from 2.5% to 0.2% in the same period. In terms of equity, income levels among the poorest 40% of the Uruguayan population increased much faster that the average growth rate of income levels for the entire population. Inclusive social policies have focused on expanding program coverage; for example, around 87% of the over-65 population is covered by the pension system: this is one of the highest coefficients in Latin America and the Caribbean alongside Argentina and Brazil.
Its robust macroeconomic performance was also reflected in the labor market, which registered historically low unemployment levels in 2014 (6.6%), although in view of a marked slowdown in growth, the latter has increased to 7.8% in July of 2017. Concerning export markets, these have been diversified with the aim of reducing the country’s dependency on its main trade partners; currently, 77% of exports go to 15 different destinations.
Uruguay continues to maintain an adequate macroeconomic framework although in a much more complicated external environment.
For more data on Uruguay, visit the World Bank’s Open Data site.
lastupdated: Oct 06, 2017